U.S. drivers are receiving a break at the pump with gasoline prices falling for two straight weeks after hitting a record high in early March.
Average national gasoline prices dropped to $4.11 a gallon on Sunday, the lowest level since the average hit $4.33 on March 6, according to auto club AAA. The last time a losing streak endured for this long was in September 2020.
Lower fuel costs offer some relief to American consumers who have been grappling with higher prices from food to housing amid decades-high inflation. The Biden administration’s decision at the end of last month to order the largest oil release in history from its reserves, amounting to a million barrels of oil a day for six months, has helped cool prices.
Pump prices could pull back to the $3.50-$4 a gallon range by Memorial Day, said Bob Yawger, director of the futures division at Mizuho Securities. The decline would correlate to West Texas Intermediate crude futures trading in the $85-100 a barrel range, he said.
WTI crude — which makes up the bulk of gasoline prices — has fallen below $95 a barrel as resurgent Covid-19 cases in China dim the demand outlook, helping to erase nearly all of the price gains in the aftermath of Russia’s invasion of Ukraine.
U.S. gasoline demand on a four-week rolling basis has fallen for the past three weeks, bucking seasonal norms, according to the latest available government data. National stockpiles are sticking close to the five-year average and U.S. fuel makers are running harder than pre-pandemic levels after returning from overdue maintenance.
At the current rate, gasoline is still more than 40% higher than at the same time last year on an unadjusted-inflation basis.